One Response to Links 5/23/12

>Too hot for jobs (not sure I buy this; the competitor regions also have housing shortages)

“For high-tech employment the multiplier is much higher, however; 5 jobs in non-tradable industries are generally created for each job in high tech.”
I think I read that Facebook has a new data center that employs like, 100 workers? Or less than a thousand anyway.

Maybe they don’t count janitors as part of the “main employment” or they just contract it out.

The POSSIBLE explanation for why higher-paid workers could have a ‘higher local multiplier’ would be if less of their income goes to rents, and their discretionary spending is diverse enough that the amount of employment they generate is at least close to proportional to their spending.

Instead of being spent on, for example, iPods with a 50% profit margin. But people generally spend about 30% of their income on housing, and the US survey on household spending supports this. Other data also shows that people with more money buy more expensive houses and that they suffered significant decreases in home value (so rich people don’t have some magical ability to avoid buying ‘overpriced’ houses) so this probably does not significantly increase ‘local multiplier’ as long as the manufacturing jobs being compared against pay reasonably well compared to the regional average.

But generally, the CBO and Moody’s both recognize that poor people have higher ‘multipliers’ than rich people. If it was true that a tech job created 5 local jobs while a manufacturing job only 1.5, it is because the tech job is being paid significantly more than 3.3 times as much as the tech worker and the economy would be better off if people avoided buying that company’s brand-name product unless it lowered its prices.